In early-2012, when Anil Agarwal's Vedanta Resources decided to merge all its Indian operations to create a $9.6 billion entity, Sameer Nath, Citigroup's 39-year-old head of M&A in India and one of its youngest rainmakers, had to deliver this whole firm in just three weeks.

It meant four parallel transactions. The Sesa-Sterlite merger was the anchor deal. The transfer of Vedanta's 38.5% stake in Cairn India, and the mergers of two unlisted arms, Madras Aluminium and Vedanta Aluminium, with Sesa Sterlite flanked this. Nath's team had to be in the thick of everything: process raw numbers, value the companies, validate share swap ratios...In real time.

Nath's team, based in Mumbai, plugged into Citi's global spread and expertise. It had specialists in metals and mining and M&A in London working in tandem with in-house oil and gas experts from Singapore. Colleagues in New York and Hong Kong came together to draw up work streams and oversee regulatory challenges. "But in all this, the Indian team was at the forefront and not playing a supporting role," says Nath.

Much like Nath, 2012 has also been especially frantic for corporate lawyer-turned-banker Bhavna Thakur, Citi's head of equities & equitieslinked capital markets (ECM) origination. With the IPO (initial public offering) market stuttering for most part of the year, business in equity markets was driven by 'block trades'—sale of large volumes of corporate stock in the secondary market by an institutional investor or stakeholder. Of the $6.4 billion worth of block deals last year, Citi did $4.4 billion. Thakur's team executed all the four large blocks: two in HDFC and two in Cairn India. It was that kind of year for Citi.

Citi investment bank—part of Citigroup Global Markets—has always been relevant in Indian corporate conversations, even when the bank dealt with fraud in its wealth-management division in 2010-11 and its global parent endured write-offs from the 2008 crisis and personnel upheavals.

But, last year, Citi was everywhere: creating a single Indian entity for Vedanta; restructuring JSW and Wipro; advising Vijay Mallya's United Spirits when Diageo bought a majority stake in it for $2.6 billion; helping Reliance Industries raise $1.5 b in a dollar bond issue, one of the largest in the Asian oil and gas space in the last 12 months.

As per Dealogic, an independent data provider for global banking, Citi occupied pole position in two of the three investment-banking segments: equity markets, where it helped clients raise about five times more money than its nearest rival, and foreign-currency bond issues, where it was part of all the 15 dollar issuances by Indian companies and banks. In the third, mergers and acquisitions, it ran a close second to Goldman Sachs in value terms, though it handled more deals.

If investment banking is all about managing high-end relationships, presupposing the client's mind and relentlessly offering solutions, then, as the tag line goes, the Citi didn't sleep. And, after a restructuring about five years ago, it worked together even more. That streamlining, whose objective was to dismantle walls between businesses and create a one-stop shop in the truest sense, appears to be paying off.

Mergers Of Its Own

Earlier, businesses were operating in silos, charting out prospects within their limited horizons. There was no incentive to work as a unified team. During Pramit Jhaveri's stint as head of investment banking, which is now under Ravi Kapoor, Citi merged corporate and investment banking.

This meant Citi could help clients do M&As and even raise acquisition financing, as it did with Rain Commodities' $914 million Rutgers buy. "If you can back your advisory services with funding capabilities, it's a winning combination," explains PA Murali, CFO of United Spirits. "As a corporate, I do not need to look elsewhere."

India was the first in the Citi universe to merge these two functions, and now it's a global template. "In some of the mega transactions we were involved in, we were able to use our advisory and financing capabilities together," says Jhaveri, now CEO of Citi India. "You can't necessarily do this effectively unless you put the two together."

Citi also consolidated some other key verticals and functions. So, for example, it joined its debt, equity, hybrids, loans and financing capabilities into a single capital-markets origination platform, currently managed by Rajiv Nayar. Within this structure, Thakur heads the equities piece, while Neville Fernandes drives bonds.

Most of Citi's global peers like HSBC, StanChart and Barclays today follow a similar model. Still, Rajeev Gupta, former MD of DSP Merrill Lynch and of Carlyle private equity's India buyout team, believes there's more to Citi's success. "They know when to synergise and when to decentralise," he says. "For large clients, who need sophisticated products and cutting-edge ideas, the investment banking team leads from the front. They don't handle anything else. But for the mid and smaller relationships, the corporate banking team holds fort."

Even fellow bankers accept Citi's X factor. "A combination of factors has come together beautifully for them," says Manisha Girotra, former chairperson of Swiss bank UBS in India and currently India head of boutique advisory firm Moelis. "Citi benefits from its strong legacy relationships with bluechip names in India. Being a universal bank, its client engagement is much deeper than monoline organisations. Lastly, Indian corporates can truly leverage their global footprint."

Challenging Year

According to Ravi Kapoor, head of corporate and investment banking, 2012 was one of the "most challenging years in the recent past". With severe global headwinds, investors and corporates were in a risk-off mode for most part of the calendar. "And even in such trying times, competition from around 35 global and local banking peers was significant."

Citi continues to compete with bulge-bracket rivals like Morgan Stanley, Bank of America Merrill Lynch, JPMorgan, Credit Suisse, UBS, Goldman Sachs, Deutsche Bank and Barclays. Equally combative are the growing Indian banks, even smaller boutiques, which benefit from their pockets of influence, some strong local relationships and brand recognition.

A weak market and stiff competition shrunk investment-banking revenues in 2012—by some estimates, 30%. Citi, like everyone else, was hit. As per Dealogic data, at $32 million, its revenues almost halved over 2011, but it still led foreign banks. Three Indian banks—SBI, Axis and ICICI—led in revenues, but they were all powered by loan disbursement, not advisory or fund-raising.

Still, not everybody is impressed by Citi's performance. "I don't think they have done something unique in M&A," quips a senior investment banker from a European bank, not wanting to be named. "In Vedanta, they were in a junior role. Providing fairness reports is not strategic-advisory work, which was done by Morgan Stanley and JPMorgan."

Adds an equities head from another global bank, also speaking on the condition of anonymity: "They did just a single IPO in 2012. They cornered some of the block trades, but did their aggression pay off all the time? The market buzz is that the risk they took may not always have been remunerative."

With investment banks under-cutting each other to win mandates to sell the shares at the smallest discount to market price, timing is literally money in these overnight transactions. So, when Citigroup decided to sell its 9.85% stake in HDFC, Thakur had just days to cherry-pick a clutch of marquee long-term investors.

While Citi wanted to maximise its returns, HDFC wanted the shares to be spread across long-term investors. "In 48 hours, we identified some highquality anchor investors and launched the trade on the back of this demand," says Thakur. "It was calibrated to leave behind a high-quality register." The $1.9 billion distributed block trade—the largest in India till date—saw demand exceed $3.8 billion. The book closed in three hours, with $1.2 billion allotted to the top 10 investors. "We had three suggestions for Citi," says Keki Mistry, CEO of HDFC. "Sell everything to avoid an overhang in the stock; sell to long-only investors and not to look at the last rupee. I think they kept their word on all three."

Citi does not disclose segment revenues at a country level, but Kapoor says it profited from all its capital-market transactions in 2012. Refusing to get into a war of words by reacting to Citi's alleged inadequacies, Kapoor adds: "We have a prudent business selection criteria and we are risk-conscious... we do not take any undue risk to merely win business and gain market-share."

Solutions Oriented

Citi's universal-banking model is an additional deal magnet. It positions itself as a one stop for financial solutions, offering credit cards to cash management, treasury operations to trade finance, capital markets to advisory. "We are primarily solutions-driven and totally agnostic to products, markets and currencies," says Rajiv Nayar, head of capital markets origination. "Not many institutions can replicate this platform." With multiple touch-points, cross-selling becomes that much easier under what is now called the 'one Citi' platform. "We do not come into the conversation when a corporate has already decided that it needs capital and is calling for a banker's pitch," says Kapoor.

"We continuously evaluate the needs of our clients and engage with them from the inception of the idea with customised solutions." For example, after Vedanta's acquisition of Cairn India was cleared, Citi helped parent Cairn Energy Plc sell a part of its residual 22% stake in its Indian arm, twice within three months. "Citi structured the deal and brought it to us. It suited our overall corporate objectives, and after negotiating on the finer details, we went ahead," recalls Jann Brown, MD & CFO, Cairn Plc from her Edinburgh office. "We have had a very good relationship with Citi since the Cairn India IPO in 2006."

The first block, of 3.5%, was sold to about 30 longterm investors for $374 million. In block trades, buyers and sellers occasionally agree that another block will not enter the market within a stipulated time. Yet, Citi got some key investors from the first lot to waive this condition, paving the way for Cairn Plc to sell another 8% for around $929 million and raise much-needed capital for its global expansion. "Citi is one of the few international banks that brings product knowledge and strong execution across both debt and equity," says Alok Agarwal, CFO of RIL. Last February, it helped RIL raise $1.5 billion in dollar bonds via two tranches, without going through the paraphernalia of a new issuance the second time around.

Citi is a key relationship bank for RIL. In the last seven years, it has worked on 19 deals for the company, including RIL's ongoing $2 billion buyback programme. "It is in our DNA not to think about any transaction as just a single opportunity but as an extension of a client relationship. Our model is for all seasons," says Jhaveri.

Global Footprint

The globality of the Citi footprint equally comes handy. "An HSBC, Standard Chartered or even a Deutsche Bank may offer similar universalbanking, but they all have pockets of strength or somewhat limited product offerings," says a former Citi investment banker currently working with a global rival who did wish to be named.

Seven years ago, such reach may not have mattered much. Today, says Jhaveri, global Indian corporations also want their banks to be trans-national. "Citi, historically, has had great metals and mining expertise across the world. And the entire team was available to handle complicated situations like our restructuring," says Tarun Jain, CFO of Vedanta Group. "That backup is a huge help in cross-border M&As."

The geographical spread also aids the ECM team to have dedicated India sales personnel in financial hubs like Singapore, Hong Kong, London and New York. They complement the 15-member team in India and the focussed syndicated teams in the global hubs. "Our sales and distribution strength gives us an edge," says Thakur. "We work together on strategies and finesse the investment thesis around each deal."

According to Tarun Kataria, CEO of Religare Capital Markets, after the 2008 credit crisis, when peers were cutting exposure to India, Citi selectively stepped up. Many bankers, in private, recall premier European banks contracting their India business even from storied names like the Tatas and the Mahindras. They still haven't managed to regain trust. "Today, they (Citi) are reaping the rewards of this long-term approach," says Kataria, formerly with HSBC as its MD, global banking and markets, and who is also Jhaveri's brother-in-law.

Kapoor cites repeat business as a measure of client confidence. "We have rarely missed any capital-market deal for our 'platinum' clients in seven years," he says. Even emerging global Indian groups like Rain recognise Citi's sustained assistance. "Since 2004-05, they have helped us in five different transactions," says group CFO Srinivas Rao. "When Indian banks did not help our cement business, Citi took over the entire exposure from Indian lenders." Can Citi sustain the momentum in 2013? Citi executives in India don't expect radical changes in strategy under the new regime of Micheal Corbat, but Jhaveri does not want to "rest on laurels". In a hyper-competitive environment where client needs evolve every day, staying relevant holds the key to a bankable Citi.